If a non-binding price floor were to be set in the market in the graph shown, it could be set at:
A. $30.
B. $16.
C. $23.
D. All of these would be binding price floors for this market.
Answer: B
You might also like to view...
The principal cause of the decline in the AFDC caseload between 1993 and 1997 was state-initiated reforms
Indicate whether the statement is true or false
Suppose a fishing boat currently brings 10,000 fish to market and earns a profit of $40,000 when the price of fish is $8 . Suppose the boat dealer had overcharged the boat owner for the boat. Upon receiving a refund of $25,000 from the dealer, what will happen to the AVC of producing 10,000 fish?
a. increases by $25 b. increases by $2.50 c. does not change d. decreases by $2.50 e. decreases by $25
Suppose a good has a demand curve given by Q = 20 - 8 × P. What is the price elasticity of demand if the price is $2?
A. -4 B. -1/16 C. 1/2 D. -1/2
According to the General Equilibrium Model, an economically efficient allocation of resources occurs when
A. no welfare-improving trades can be made. B. the producer's MRT = the consumer's MRS. C. all consumers have the same MRS. D. All of these exist.